Brokerage Models

NAR’s Tail Wagging the Dog National Control Model

On Tuesday, December 02, 2009, Inman News carried a new piece by Matt Carter, entitled “NAR Backing Realcomp Appeal.” REALonomics believes the article is another demonstration of NAR’s attempt as the tail of the industry, to wag us, the dog. Here is our response to NAR’s reported actions.

---

Here we go again!

NAR should be seen here in its true light, a purveyor of control, monopolization and the promotion of the punishment of creative models that do not meet the local real estate dominance model put in force and sustained by its vast network of local Associations.

Although we are not supporters of discount brokerage as a viable business model, we feel the need to speak out on this issue and the freedom of Broker-Owners to create business models without the fear of retaliation and punishment by NAR and local Associations.

We are forced to ask the question, “Is anyone paying attention to how our dues, financial assets and human capital are being used by NAR?” Furthermore, are we paying attention to how NAR and local Associations are dealing with Broker-Owners who are not lining up in lock-step with centralized policy?

Read more

Brokerage Models

Tenus Terminatio Cuspis?

This Post Syndicated from e-Partner

Ours is an industry with legacy. The brokerage business has seen many booms and endured many busts.

Many have come and most have gone.

Road kill has always been a part of the mix; the strong eat the weak and the weak find refuge in other endeavors.

The real estate industry has always been a town occupied by heralded gun slingers whose reputations have become the stuff of legends. Sometimes these are brands, other times they are movements, fads or personalities that come and go with the wind.

We have always been a tad reckless; that’s why we are a business model willing to predicate its economic viability on the unpredictable and unenforceable productivity of independent contractors. Let’s admit it, the business cultures we have created have typically been less than IBMish.

Nonetheless, we have moved from era-to-era, cycle-to-cycle and shifted from mode-to-mode, surviving the financial droughts of summer and living through the long, frigid economic nights of our many winters. We are an industry that could legitimately lay claim to squeezing blood from turnips.

We have historically endured and outlasted our most caustic critics who have mocked us at every turn and likened us to dishonest snake-oil salesmen.

Yes, we’ve been brought back from the dead a number of times. We are a cat with nine lives and most of them have been used up.
Are we now reaching the termination point? Are we, Tenus Terminatio Cuspis?
Read more

Brokerage Models

Speed Cubing – Our New Challenge

Ours is an industry not altogether unlike Rubik’s Cube®. The solution to the cube was once something we played with for hours and hours. After all, we had plenty of time and no one was in a hurry. Those days are over. Today solving the cube quickly has become the stuff of world records. If you can’t “speed cube” don’t waste your time.

Contests are held to determine who can execute the exact pattern in the least amount of time. The world record holders are those that can manipulate the cube with the greatest amount of speed. Solving the cube is no longer the game…time is the game.

I call this game “Speed Cubing” and that’s what Rubik’s Cube® is all about today. Solving the puzzle in a slow, thoughtful and deliberate manner has become boring…doing it fast is the new requirement. The Rubik’s Cube® culture now seeks speed solutions…solving the puzzle the old methodical and mechanical way is insufficient.

WATCH THIS VIDEO, THEN, DO YOURSELF A FAVOR AND READ ON:

Speed is Everything. Understanding the pattern is everything. Execution is everything. Agility is everything. Having a well oiled cube is everything…hang-ups are the death knell to solution. It’s not the end game we now seek with the cube…it’s the ability to execute the solution faster and faster and faster and faster.

Moving quickly and managing the manipulation of the real estate cube is the new challenge facing broker/owners, agents and mortgage and title services. Keeping pace is no longer going to be enough. Merely being in the game is no longer sufficient. The tortoise and hare analogy has become all hare and no tortoise.

Flow, adaptation, rotation, pattern manipulation, agility, flexibility, bending, stretching and beating the clock…that’s what we face as the new challenge to our business models. Running at the speed of sound and setting land speed records is how companies will need to manage their models in order to simply stay in the game.

Ours is a 24/7/365 hundred yard dash followed by a 24/7/365 hundred yard dash a 24/7/365 hundred yard dash a 24/7/365 hundred yard dash a 24/7/365 hundred yard dash…next year we will convert this into a 50 yard dash! When we move from a 100-yard dash to a 50-yard dash the speed of our agility and business adjustment will need to be one-third what it was, not one-half.

The distances Broker/Owners will be required to traverse each day will be shortened and the speed required to move from point “A” to point “B” will not be governed by new formulas. In the new race we will be faced with “new real estate model math” a formulas where ten divided by two (10/2) will not necessarily equate to five…but rather, some other solution. What is our plan for working with the new real estate model math where the formula solutions become more bizarre than we ever imagined, such as:

Our point is this; the math we once used is being changed by the realities of the market and the demands consumers are placing upon us.

Our Problem? We can only speed so long. Burnout becomes inevitable at some point. The laws of physics enter into the framework at some point, limiting our ability to shave off another .0000001 second. Collapse occurs when we are pushed too far…too fast…and from too many angles. Exhaustion sets in when any business owner in any industry is faced with models he/she cannot channel, control and direct toward profitability.

Change is the model of our future. Managing and controlling multiple changes in the molten hot crucible of speed is the new required brokerage management skill set. Building businesses with appropriate pace and rythm, building operating models that allow for regulation of the tachometer and possessing the skill to regulate the business throttle has become paramount to adequate and sustained ROI. No speed management, no profit. No change management, no ROI.

We’re only Human. We cannot perpetually run our organizations pedal-to-the-metal if we want to stay in the game. Yet, that is what many Broker/Owners are currently doing. Our operating reference points are being changed and the operating cultures are evolving to a higher plane…morphing into a new life form. As REALonomics has been predicting for years that, “new rules are being written that will govern how the real industry industry operates…and, although we could be, we are not necessarily the scribes.”

Broker/Owners (agents too) are going to be challenged like never before, creating new demand, new rules and new stress in an already vice-like, pressure cooker. Watch for our next post.

Brokerage Models

2+2=5.439

REALonomics is an exploratory quest for a New Model Math for use by brokerage firms operating in the Third Economic Wave of the real estate industry.

During the First Economic Wave, the broker-centric era, and for most of the Second Economic Wave, the agent-centric era, business models were predicated on old, predictable model math, where 2+2 produced four. In the current climate, where the consumer has control over the “economic joystick,” we are forced to pose the question; what if 2+2 no longer equates to four?

Read more